By Fast Brokers – The USD/JPY is edging lower again with investors exiting crude while sending the Cable and EUR/USD lower. Although the S&P hasn’t logged as large of losses as the aforementioned correlations, they are trading right at June lows, an important level technically. The slight pullback in the USD/JPY reinforces a theme of negative market sentiment. However, the USD/JPY remains above 6/29 lows, and we’ve yet to witness significant volume to the downside. Therefore, the consolidation of the USD/JPY carriers on with our 1st tier uptrend line slowly creeping into the picture. We expect the consolidation to continue until investors make a more concrete directional decision in the S&P. The trend decision could come sooner than later with the 2nd quarter earnings season beginning Wednesday while most of the USD/JPY’s correlations trade at or near important technical levels. The amount of investor uncertainty is increasing in regards to the sustainability of the present economic recovery. This uncertainty is reflected by the negative tendency of the USD/JPY. Any retracement below our 1st tier uptrend line and March lows could signal the beginning of a new leg down.
Japan will release a set of economic data points tomorrow, including core machinery orders, bank lending, current account and the M2 money stock. Investors will pay close attention to see if core machinery orders can continue their positive performance, or whether the data point experiences a setback along with the recent Tankan number. It seems Japan’s manufacturing and export sectors are stuck in a rut due to declining global consumption coupled with an abnormally appreciated Yen.
Present Price: 95.26
Resistances: 95.73, 96.33, 96.90, 97.45, 98.05
Supports: 94.99, 94.45, 93.76, 93.32, 92.57
Psychological: 95
Market Commentary provided by Fast Brokers.
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